Campaign: Culture, Media and Sport Secretary John Whittingdale is poised to order a licence fee freeze

The Government is set for a major confrontation with the BBC over cuts which could slash the Corporation’s budget by up to half a billion pounds a year.

Culture, Media and Sport Secretary John Whittingdale is poised to order a five-year freeze in the annual £145.50 licence fee. And a new review is expected to support Tory moves to stop people who refuse to pay the fee being sent to jail.

The plans follow Tory claims that the BBC was biased towards Labour during the Election – a charge vehemently denied by BBC chiefs.

Whitehall sources told The Mail on Sunday that a five-year freeze was ‘almost inevitable’.

‘All public services are being asked to make big savings and there can be no case for exempting the BBC, particularly when so much of what it does can be provided by the private sector,’ said one source.

When Whittingdale was made Culture Secretary after the Election, David Cameron told him to ‘sort out the BBC’.

Whittingdale last year called the licence fee ‘worse than a poll tax’ – and this month said it was a ‘regressive’ levy and unfair to the poor. Talks are due to start soon between Whittingdale and the BBC on renewing its current Royal charter, which ends in 2016 and sets the licence fee as well as deciding other aspects of how the BBC is run. During equivalent talks in 2010, the Coalition froze the fee for the current period.

Because of ongoing inflation, continuing the freeze until 2020 would cut approximately ten per cent in real terms from the £3.75 billion a year that the BBC gains from the levy – an annual loss of more than £300 million.

RELATED ARTICLES

Share this article

Share

It could lose another estimated £200 million a year if licence-fee evasion is decriminalised, a potential total drop of up to £500 million over the next five years.

The calls by Tory MPs to make non-payment of the fee a civil rather than a criminal offence are expected to be supported later this month by a Government-backed report under top barrister David Perry QC.

The plans follow Tory claims that the BBC was biased towards Labour during the Election – a charge vehemently denied by BBC chiefs. Above, Broadcasting House, the Corporation's London headquarters

About 3,000 people a week are prosecuted for failing to pay, accounting for one in ten of all cases heard before a magistrate. Dozens are jailed each year.

The BBC claims removing the threat of criminal sanctions could double the evasion rate.

Earlier this month, BBC director of television Danny Cohen was accused of ‘holding viewers to ransom’ after he threatened to axe programmes if fee evaders were no longer sent to court. ‘If the BBC takes on more financial obligations, it’s got less money to spend on content,’ he said. ‘We have to be aware of that in all negotiations.’

However, former BBC presenter Jeremy Paxman argued the licence fee is doomed. ‘It clearly can’t last,’ he said. ‘As computers and TVs become indistinguishable, a tax on a particular technology becomes almost impossible to justify.’